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U.S. Gambling Giant Punts on $11b Merger
In a blockbuster deal that would merge two of the biggest gambling companies in the world, MGM Mirage has offered to buy Mandalay Resort Group for about $US7.65 billion. MGM Mirage offered to buy Mandalay for $US68 a share in a cash deal that would include assuming about $US2.8 billion in debt. The offer would provide Mandalay shareholders with a 12.8 per cent premium over Friday's closing stock price of $US60.27. Among MGM Mirage's motel-casinos are The Mirage, Bellagio and MGM Grand. It sold its Australian Darwin casino to New Zealand's Sky City Entertainment in February for $150 million. The Mandalay Resort Group's flagship property is its towering, gold glass Mandalay Bay hotel-casino on the south end of the Las Vegas Strip.
The combined companies would allow MGM Mirage to capture a broad swathe of the market in Las Vegas and establish it as the industry's top gambling company, surpassing both Caesars Entertainment and Harrah's Entertainment in revenues. Mandalay Resort Group said it had received the offer and "will carefully evaluate the proposal from MGM Mirage" and will respond in due course. A source close to the negotiations said MGM Mirage made "a friendly but unsolicited bid". Talks have been under way for the past few days, the source said.
SOURCE: Associated Press.
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